Malcolm discusses broadband internet coverage across Scotland
Debate on the Budget of the UK Government Malcolm Chisholm (Edinburgh North and Leith) (Lab):
I apologise for seeking to influence the order in which the Presiding Officer calls speakers, and I undertake never to do so again. I am sure that I will be suitably punished by giving a bad speech this afternoon.

I will start in the safe territory of the respected economist Will Hutton, who always gives a fair and balanced view of budgets. In his Sunday column in The Observer, he was moved to say at the very start that

“The budget was a disgrace. The government has washed its hands of any attempt to relieve the worst recession since the 19th century. I believe that millions are paying more now so that millionaires can pay less in a year’s time. For the avoidance of any doubt, and for the sake of SNP colleagues, I assure members that the Labour Opposition at Westminster will lodge amendments to the Finance Bill to ensure that the 50p tax is maintained. We probably do not want to hear any more about what happened on Monday night but - as the cabinet secretary will know as a former Westminster member of Parliament - the vote was not specifically about corporation tax, and it would not have been the normal time to register opposition to specific tax changes as distinct from the budget as whole. However, that is enough of that.

What is striking about the budget is not only what is in it, but what is not; one could make a whole speech about the missing elements. I see that Gavin Brown is unfortunately not in his place just now. One of the most significant things in the Office for Budget Responsibility report, to which he referred, is that there is no material adjustment to its economic forecast this week, as compared with two weeks or a month ago. In other words, the budget did not fundamentally change the macroeconomic outlook and was, in that regard, a missed opportunity.

The budget contained some good measures, such as the tax relief for the video games industry, which was first granted by Alistair Darling and then removed by the Conservative Government. Such specific examples can be given, but of far greater importance is the disaster that the budget brings for millions of ordinary people. As the Institute for Fiscal Studies has pointed out, and as the cabinet secretary reminded us, it will be people in the lowest two deciles who will suffer the most - especially families with children.

John Swinney:
Will Malcolm Chisholm reflect on the implications of the budget proposals on market-facing pay for some of the people in Scotland and other parts of the United Kingdom about whom he is talking?

Malcolm Chisholm:
That is another dimension. The budget not only describes things that are going to happen in the immediate future - in this year and the following year - but points, as I was going to mention, to £10 billion of further cuts to the welfare budget, which is truly shocking and scandalous.

The budget also intimates - as the cabinet secretary highlighted - a wish to go down the path of regional pay. Public sector pay is the last prop of many local economies. It would perhaps not be described in that way in Edinburgh, for example, but the idea that people cannot get jobs in the private sector because of the level of pay that is received by nurses and teachers is absolutely absurd. There are thousands of well-qualified people who are desperate to get employment in Edinburgh and elsewhere, and we welcome the jobs that are coming, particularly from Gamesa. It is lack of demand, not the pay of public sector workers, that is causing problems in the economy.

I was saying before that intervention that the lowest deciles will suffer the most. To a significant extent, that is because of the raid on tax credits. I was very pleased that Ed Miliband announced in a speech today that Labour would seek to protect working families from the raid on tax credits and would raise the money for that by reversing the Government’s pension tax break for those who earn more than £150,000 a year. Labour budgets over the years were fair and progressive and what we are arguing for on tax credits and VAT reductions, given that VAT is a regressive tax, are in that tradition of fairness and progressiveness.

It never ceases to amaze me that lower-paid people are to be made to work harder by getting less, while the rich are to be made to work harder by getting more. According to the red book, they will gain £3 billion, which will rise to £4 billion, from the corporation tax cut.

Mary Scanlon:
Will the member give way?

Malcolm Chisholm:
I am in my last minute. Otherwise, I would be delighted to take an intervention. I will be guided by the Deputy Presiding Officer.

The Deputy Presiding Officer:
I can give you back the time for the intervention.

Mary Scanlon:
Would the new progressive Labour regime also reinstate child benefit to people who earn in excess of £60,000 a year?

Malcolm Chisholm:
I cannot speak for what Labour at Westminster will say on that issue. It is well known that there are problems with the proposal, in that someone who earns £50,000 could lose money whereas a couple who earn £99,000 would lose nothing. My personal priority is to reverse the raid on tax credits. I thank the Deputy Presiding Officer for giving me that extra time.

One of the few good things to come out of the budget is that the Labour lead over the Conservatives before the budget was 4 per cent, and it is now 17 per cent. I suggest to SNP colleagues - although they will not agree - that the answer to a bad UK Government is a good UK Government, and the sooner we have one, the better.
March 28th 2012